#133 Starbucks in Japan – Sometimes (but not very often), instinct works!

One summer night in 1996, Howard Schultz, founder and now Executive Chairman of Starbucks, the Seattle-based coffeeshop giant, had dinner with the company’s newly acquired Japanese partner. It was the night before the opening of the first ever Starbucks in Tokyo. In fact, it was the first Starbucks opening outside of North America altogether! The weather was hot and humid, and Schultz realized that Starbucks didn’t have any cold drinks! Hot coffee would really not be attractive to Japanese consumers at that time of the year. He also remembered what consultants had told him about the Japanese market months earlier – the no smoking policy would not fly in Japan, the cost of real estate was too high for a chain of coffeeshops, and no Japanese customer would ever want to be seen drinking coffee from a paper cup in the streets. Instinct had driven Schultz to ignore the consultants’ advice and to try anyway. Besides, there was a direct flight from Seattle to Tokyo, so what could go wrong?! But that night, he was convinced that he had made the wrong decision. Wanting to prepare everyone for a disastrous business opening, he asked the interpreter to give his Japanese partner the bad news.

After a difficult night, Howard Schultz arrived at the store without much expectation, only to see hundreds of customers lining up around the block, waiting to get their first cup of Japanese Starbucks coffee! Only later he found out that the interpreter had lied to Starbucks’ Japanese partner. Instead of translating what Schultz had really said, he had promised the largest and most exciting store opening ever.

As a professor of International Business and a consultant on international market entry, it pains me to admit, but sometimes instinct works!

(Based on Guy Raz’s live interview with Howard Schultz on 9/27/2017 in Seattle).

 

 

 

 

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